continuously paying on credit to close?
July 22, 2011 7:46 AM   Subscribe

I'm asking for my mom who is worried for her sister - Should my aunt/her sister continue to pay to keep clearing her credit while waiting to close on her house?

My aunt found her house and put a contract on it at the start of this year. We expected to have Easter in her new house. Her credit was clear, she had them do a rapid re-score thing and she hadn't put anything new on it.

Old things like a 6 (I think) year old credit card, old phone bills, etc have popped up one at a time. They tell her she can't close on her house, she pays whatever it is, they wait a month, recheck her score and something else pops up. Its been a big circle. She has paid over 4000 dollars and is worried she'll lose her contract especially after the deal she got on it.

My mother isn't sure she pays the company that pops up or what.

Does this sound normal? Should my mom tell her anything? She's worried my aunt is being scammed and may not get her house.

Thanks.
posted by grablife365 to Home & Garden (17 answers total) 1 user marked this as a favorite
 
They tell her she can't close on her house, she pays whatever it is, they wait a month

Who are "they"? Mortgage broker? Lending institution? Credit "fixer" or "counselor"? I worked with my mortgage broker to have credit in between going to contract & closing. Due to issues with a lack of building permit, this was some time for me.

[they] recheck her score and something else pops up.

This part is fishy. She should be able to sit & see everything on her credit report, on her own. First thing to do is to figure out who "they" are though.
posted by kellyblah at 7:59 AM on July 22, 2011


Does your aunt have a history of not paying her debts? I don't see how her credit can be 'clear' one minute and then in the next she's owing $4k+ across multiple accounts? Or is the money not for clearing past debts? IME that's not how credit scores work. When you get your credit report it lists all your accounts and the activity history. Unless her report is full of erroneous 'dings' that she's paying to have removed, I don't see how this process is really going to help her - paying off unpaid debts would improve her score somewhat but it wouldn't remove the accounts from her report or score calculation. The mortgage company (or whoever she is wanting to borrow from) will still be able to see that she has a history of not paying her bills.
posted by missmagenta at 8:05 AM on July 22, 2011


This is very odd, as you know or you wouldn't be asking about it.

As kellyblah says, you really need to find out who all the parties involved are. I have bought and sold 5 homes, and pretty much never had issues, even with not so great credit. The score was pulled at the time of the application, and that was it. In one instance, the bank asked me to write an explanation letter for their file, as there were a lot of overdue medical accounts on my credit report. But no one ever pulled more than one score. Also, I am confused that if her credit was clear she had them do a "rapid re-score" whatever that means.

Is she buying on contract for deed directly from the seller? Is she dealing with a mortgage broker? A bank? Is a real estate agent involved, and is it her agent or the seller's? Who is she paying the $4000 to? Does she have an attorney?

Anyway, something is fishy somewhere, either with the seller / bank / broker, and/or there is confusion in how the story is being told/retold, as well as a lot of missing information.

I have always had an attorney look over things any time I have bought or sold a home. She should probably contact one right away and have them see what's up. It needn't be terribly expensive, but can save a ton of money and hassle in end. It doesn't make sense to make what is most likely the most expensive purchase she will ever make, and not have some legal representation.

Good luck!
posted by The Deej at 8:20 AM on July 22, 2011


If her credit report is showing delinquencies that are adversely affecting credit decisions, she is entitled to request a copy of the report herself to see what is on there. You are also entitled to pull one copy from each of the 3 major credit bureaus each year free of charge to monitor what is on her account. It is not typical for things to "pop up" one at a time like that, especially if they are decades old debts. It's also strange that a seller would keep an offer open on a house for that long if credit problems could not be resolved.

It all sounds really fishy and I would recommend that you clarify who "they" are as suggested by the posters above. You may also want to consider contacting the attorney general if things continue to seem suspicious once it's clearer who "they" are.
posted by goggie at 8:22 AM on July 22, 2011 [2 favorites]


I'm going to nth--who is (are) this mysterious "they"? This doesn't sound at all like how a credit report works.
posted by thomas j wise at 8:24 AM on July 22, 2011


Same here... you are entitled to your credit report from all 3 agencies once a year. DON'T use 'freecreditreport' or any of those other places that want you to pay for something. Go direct to the report agencies' websites.

Those reports will show everything, and nothing 'new' should 'pop up'.

Also, she should be sure to check the report that it's actually her if there is a debt. I have a common name, and I've found other folks on my credit report from time to time. A letter to the reporting companies listing all the errors usually clears that up quickly.
posted by rich at 8:35 AM on July 22, 2011


The "they" must be a lender or mortgage broker if they are doing rapid rescoring. From an article on the ABC News website:
If there's an error on your credit report, or if you haven't structured your debt very wisely, your credit score may not be as high as it could be. Rapid rescoring is a service offered by local credit bureaus. Unfortunately, it's not directly available to consumers. You'll have to go through your mortgage broker or lender.

Here's how it works. If there's a mistake on your credit report, you have to provide proof that it's a mistake. A rapid rescoring expert can research your claims and gather written documentation. Next, the expert forwards your materials to the three national credit bureaus and asks for a correction. You can do this yourself, but it takes weeks. Companies that offer rapid rescoring have dedicated phone and fax lines they use to communicate with the big credit bureaus. In 24 to 72 hours, your credit report is corrected and your credit score rises as a result.
Further down in the same article:
In addition to correcting errors, a rescoring expert can help you restructure your debt to improve your score. For example, say you have three credit cards, and one of them is near the limit, but you hardly use the other two. By transferring some of that debt to the other two cards, you may be able to improve your score.
Looking on other websites, it seems she is paying $50 - $75 each time they do a rapid rescore (on top of what she's paying to bring herself current on her debts). It sounds to me like her desire for a specific house by a specific date is causing her to make unwise financial decisions -- that is, if she's got lots of debt problems, will a huge debt (mortgage) help? I'd recommend rethinking her plan, but I've found that once people get such a specific idea in their head, it's very hard to reason them out of it.
posted by Houstonian at 8:44 AM on July 22, 2011


My concern is that she is going through one of those scam companies promising to 'fix' her credit.
posted by rich at 10:06 AM on July 22, 2011


Nthing everyone who is having a hard time understanding how old things can pop up. Your aunt should request her own copies of the credit report. My wife and I did then when we refinanced. It was one evening's work to get all the information and a couple of days of email to fix one stupid problem on the report and one week later we were clean. Finished. Done. Nothing else "popped up" later because that's just not how credit reports work. They don't just magically find something new that happened six years ago.

Although a credit check was run during this process (obviously), we didn't pay for it. Or rather, we didn't pay directly; it all came out of the rebate on the mortgage.

Is it possible that she's dealing with a scammy company and that rather than these things "popping up" one at a time, the half dozen problems are up front, right there, and they are just telling her about them one at a time and collecting a new fee each time?
posted by It's Never Lurgi at 10:09 AM on July 22, 2011


This sounds fishy to me too, but I have a thought regarding items "popping up". I believe that some of the so-called credit repair services work by continuously disputing the bad information. When you dispute something on your credit report, the credit agency has 30 days to investigate and resolve the dispute. It could be that as they dispute the items, they are removed or hidden (temporarily) from the report, making it appear better than it really is, and then days/weeks later after said item has been verified as valid, it would be placed back on the report.
posted by slicesoftree at 12:00 PM on July 22, 2011


Response by poster: I'm typing on my phone so I'm sorry for errors -

Thank you all so much! I believe this is a broker but I'm not sure since she's never been specific. I offered my former broker but I think this is who she went with instead.

The Deej, when I was buying I did as you did letter writing and all. I asked her about that and she said she did that too.

She also said that she took care of outstanding debts, paid off credit cards etc but my mom says things just keep coming. I think they are the ones that tell her about these issues.

Rich, she doesn't really have a very common name. It is possible though.

I'm going to pass this information to her soon. Thank you.
posted by grablife365 at 12:03 PM on July 22, 2011


doesn't sound right at all. Who is this seller that would continue to hold up a real estate deal for 4 months? what got my attention was that you said she got a great deal on the house. sorry to say it, but it sounds like a scam.
posted by honey badger at 2:53 PM on July 22, 2011


I agree that this sounds like a scam. If she is in the US you could do some web searching or phone calling to find the consumer protection office of the attorney general of her state. Get in touch with them and see if they have anything to say about this.
posted by LobsterMitten at 1:10 PM on July 23, 2011


For example if she is in Texas, the phone number of the Attorney General's Office is (800) 621-0508.

Texas attorney general's page about credit report scams (pdf) - this explains briefly how she can monitor and fix problems with her credit report directly, herself, without going through any fishy agency.

Texas attorney general's page about buying a house - very informative, list of scams and hidden costs to watch for.

Texas attorney general's page about mortgages - gives contact info for the attorney general's office.

Texas Attorney General's page about scams and fraud - talks about scams more generally
posted by LobsterMitten at 1:29 PM on July 23, 2011




Response by poster: Thank you, LobsterMitten!
posted by grablife365 at 9:35 PM on August 6, 2011


You're welcome! I hope that she's getting some help with this situation.
posted by LobsterMitten at 10:08 PM on August 6, 2011


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